Reliance-Disney Merger Update: Reliance Industries Limited (RIL) and Walt Disney are in the final stages of negotiations to complete their merger. This potential new venture is expected to become India's largest media and entertainment company. The exclusivity period for bilateral negotiations ends on February 17.
RIL is expected to invest up to $1.5 billion in cash in the new company
Reliance-Disney Merger News: Mukesh Ambani-led Reliance Industries Limited (RIL) and Walt Disney are in the final stages of negotiations to complete their mega stock and cash merger to create India's largest media and entertainment company Economic Times (ET) Report. The exclusivity period for bilateral negotiations ends on February 17.
With a 42-45% stake in the combined company, Viacom18 is expected to become the largest single shareholder.
Parent company RIL plans to inject up to $1.5 billion in cash into the new company and acquire a direct stake. The RIL group as a whole will hold a 60% stake while Walt Disney will own the remaining 40%.
According to the AND According to reports, Reliance executives are currently developing a three-year capital allocation program across all businesses, which will be presented to the board soon. The media business is expected to play a crucial role in the company's growth plan.
The current proposal is to set up a spin-off subsidiary of Viacom18 Media that would merge with Star India through a share swap, insiders revealed AND. Both companies are considered to be similar in size and are each valued at around $4 billion to $5 billion. Therefore, RIL will use cash to acquire controlling stake.
Jio Cinema, a unit of Viacom18, will be integrated into the deal. According to analysts, Disney's valuation of its India business has fallen sharply since its acquisition in 2019, largely due to the mounting losses suffered by Disney's sports franchise in India AND.
Viacom18's entertainment network in India is a collaboration between Ambani's TV18 Broadcast, Paramount Global and Bodhi Tree Systems.
Founded by James Murdoch and former Disney India boss Uday Shankar, Bodhi Tree Systems is an investment fund. As a shareholder of Viacom18, Bodhi Tree will, contrary to some reports, indirectly hold shares in the new company, the company's executives involved said AND.
“The Big 4 firms, doing due diligence on both sides, along with the numerous retained law firms and corporate executives, are working against time to put the finishing touches to the deal,” a company executive said AND. “They can mutually extend the deadline if they want, but both sides have the support of their top leadership to iron out any differences and complete things by the end of the budget. The Indian media landscape is changing, so they want to join forces and consolidate as soon as possible,” the executive added.
The board of the new company is expected to consist of Disney's three representatives. The board is expected to consist of eight or nine members.
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